HONDA (A) CASE STDUY

BY GROUP 5, SECTION 1
HARSH KAMAL BHATNAGAR
(FT151009)
PRIYANKA MANOJ KUMAR
(FT151012)
SREERAM K MOORTHY
(FT151033)
MAYANK MODH
(FT151057)
ANOOP KRISHNAKUMAR
(FT151077)
KUSHAL KISLAY
(FT151093)
DIKSHA MEHTA
(FT151097)

Introduction
Founder Soichiro Honda
Post World War II

 A brief timeline:
1947 Introduced first Type A 2 stroke engine,
Competition consisted of around 247 Japanese
participants in a loosely defined motorcycle
industry
1949 Introduced light weight 50cc 2 stroke Type
D motorcycle more reliable than most
competitors bikes
1951 Introduced 4 stroke engine
1953 Became fully integrated producer of
engines and all ancillary parts

Initial Strategy
Offer multiple product lines vs 1 model stratgegy
used by competitors
Leadership in product innovation
Economies of scale Mass production
50 cc Honda was an explosive success with sales
3000 units/month after 6 months in market

Decided to invest in highly automated plant with

capacity 30,000 units/month
Result Platform to invade the US Market

What happened in the US motorcycle

market?
1959 Honda, Suzuki, Yamaha, Kawasaki
competed in the US market along with the US
motorcycle producers such as Harley
Davidson, British builders Triumph, etc
Honda established as Worlds largest Motorcycle
producer
Established US subsidary American Honda
Motor Company

Hondas US Strategy Market Share

Market Share(or Sales Volume)

Develop region by region West coast to East coast
Change consumer perception Heavy Marketing
Brand ambassador Marlon Brando
Tag line You meet the nicest people on a Honda

Result Sales rose from $500k to $77mil and

Honda(+Yamaha+Suzuki)s market share became
85%

 Japanese efforts in US motorcycle market also

helped boost sales of other producers such as
BSA, Triumph and Harley-Davidson

Later Strategies
Heavy commitment to R&D and advanced
manufacturing techniques
Productivity based cost advantage
Cold Storage of designs
Very less time to market 18months
Priority sales volume over short term
profitability
Develop Selling and Distribution Systems

Selling and Distribution Systems

SnD activities include

Sales representation at dealer level

Physical distribution of parts and machines
Warranty and service support
Dealer support
Advertising and promotion
Market planning and control

 Result SnD systems help increase market

share

How?
Better product range -> More sophisticated SnD
systems ->Easy to attract good dealers
Good dealers, which are well supported at
marketing company level, lead to increased
retail sales
Competition among dealers leads to volumeboosting price cuts for public

 Conclusion:
1. High productivity gave cost advantage over
competition. Cost structure was so well managed
that Honda could give tough competition in the
future without Dumping
2. Strategic steps such as focus on market share,
high sales volume, focus on R&D, SnD network,
etc helped Honda become leaders in the US
motorcycle market

Thank you!